Which Statement Accurately Describes Capitalism

question 1

Multiple Choice

Which statement accurately describes capitalism?

• A)Industrial capitalism is characterized by pools,trusts,holding companies and an interpenetration of banking,insurance and industrial interests.
• B)Mercantile capitalism emerged in the United States in the period directly following the civil war.
• C)In state welfare capitalism the government plays an active role in regulating economic activities in an effort to smooth out the boom-and-bust pattern of the business cycle.
• D)Financial capitalism developed in the period immediately prior to the Renaissance.

---

Definitions:

Consumer Surplus

The difference in the total amount consumers are capable of paying for a good or service versus what they really pay.

Producer Surplus

The divergence between what producers expect to get for a good or service and the actual compensation they receive.

Deadweight Loss

The loss of economic efficiency when the equilibrium outcome is not achievable or not achieved in a market.

Perfectly Inelastic

A market condition where the quantity demanded or supplied does not change in response to price changes.